Government agencies continue to target ICOs for potent rule violations. In Colorado, the Division of Securities has flagged four projects as potentially suspicious. These ICO projects are currently subject to a cease and desist order, bringing the total to twelve so far. It is another big step toward legitimizing initial coin offerings in the United States.

More ICOs Faces Regulatory Scrutiny

In the United States, a proverbial crusade against illicit ICOs is taking shape. The SEC is clamping down on every company violating securities guidelines or defrauding investors. Individual US states also take similar measures if the need arises. For Colorado’s Division of Securities, four projects are on the radar and received cease and desist orders this week.

These companies are flagged by the ICO Task Force. This unit is created to investigate potentially fraudulent activity. In the case of these four companies, there are some serious concerns to take into account. Bitcoin Investments guarantees daily returns to investors. Pinkdate offers dividends to investors without filing with the correct authorities. For Prisma, the situation is a bit different. Investors can earn hefty returns due to the company’s lending and arbitraging model. Last but not least, Clear Shop Vision is a serial ICO company. They have organized three different funding rounds throughout the second half of 2018. This is considered an unregistered securities offering and is thus subject to additional scrutiny.

The ICO Industry Needs More Scrutiny

The action undertaken in Colorado is an important step. Weeding out the potentially nefarious projects from the ICO industry needs to be the top priority. Even though there is more work to be done, efforts like these show a proactive approach is warranted. A cease and desist can ensure no investors lose money in the process.

The lack of nationwide initial coin offering regulation remains a problem. In the United States, no domestic crypto regulation exists. As such, individual states often draft their own laws and guidelines. That makes it somewhat complicated for genuine companies to operate. Moreover, it allows for ICOs like these to almost slip through the mazes of the net.

Until such regulatory measures go into effect, efforts like these will continue to make headlines. Clamping down on fraudulent investment schemes is vital. Bringing more legitimacy to this industry is very difficult. Even legitimate projects often struggle to develop working products and services. Despite the number of scams, the overall funding of ICOs remains relatively high.

Do you think Colorado’s Division of Securities was correct in issuing the cease and desist orders? Let us know in the comments below.

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